Gross state revenue numbers continue to lag behind forecasts, but the State Tax Commission sees some positives in the latest report.
Tax Commissioner Tony Fulton says he understands, overall, the latest monthly gross state revenue figures fall two percent below the forecast at $507 million, mainly due to significant drops in individual and corporate income tax revenue.
“Sales taxes actually tracked above the forecast and year-over-year sales tax receipts to the treasury actually grew by about 7 1/2%. So, that’s a bright spot,” Fulton tells Nebraska State Network affiliate KLIN.
Gross General Fund receipts for September totaled $507 million, 1.6% below the certified forecast of $515 million. Gross individual income tax receipts fell 2.8% below the forecast in September, while gross corporate income tax receipts dropped off 15.2%. Gross sales and use tax receipts came in 1.9% above the forecast.
More tax refund checks went out than expected: $70 million, instead of the forecast $54 million.
Fulton says, despite the September numbers, state revenue seems to be trending stronger than earlier in the year.
“Both in the major categories of taxes, sales taxes and income taxes; they were both up, year over year,” Fulton says. “So, that causes me to look at the forecast. Maybe our forecast is a little too optimistic.”
Fulton, a former state senator, does say state legislators need to keep the totals in mind as they begin a new legislative session in January.
“And that is because, with respect to the forecast, we are tracking below the forecast. So, we need to really be on our toes in state government,” according to Fulton. “That being said, the next few months we’ll continue to monitor what’s happening to receipts.”
Gov. Pete Ricketts has decided against calling a special session to address the revenue downfall and subsequent projected budget deficit. His office issued the following statement:
“Circumstances can still change depending on the October meeting of the Nebraska Economic Forecasting Advisory Board, but based on current receipts and the state’s healthy cash reserve I am not likely to call a special session. The downturn in revenue is certainly a significant challenge, but we are working to manage it within state agencies. I have every confidence that the Legislature and I can work together in January to do what needs to be done to meet the challenge.
“In the meantime, last quarter I reduced state agency allotments to cause spending restraint, and I am further reducing their allotments in the next quarter to cause additional restraint. Today, I am putting in place a travel ban on non-essential out-of-state travel and announcing a hiring freeze for all non-mission critical positions in state agencies. Additionally, all agency directors have been working on adjustments to their budgets and identifying efficiencies in agencies to prepare for the next biennial budget.”
The governor instructed the State Budget Division to reduce allotments for the 2016-17 fiscal year by 1% each quarter and to prepare for further cuts.
Jane Monnich, KLIN, contributed to this report.